India's Zomato cashes in on demand for online food orders, files $1.1 billion IPO
By Chandini Monnappa
BENGALURU (Reuters) -Indian food delivery startup Zomato, backed by China's Ant Group, filed for an IPO of up to 82.5 billion rupees ($1.11 billion) on Wednesday to cash in on a pandemic-led surge in online ordering.
A flush of money from foreign funds and feverish interest from mom-and-pop investors putting their lockdown-led savings to work has driven listings in India so far this year, but a recent surge in COVID-19 infections is dampening investor appetite.
Earlier this year, companies such as paint maker Indigo Paints Ltd, engineering firm MTAR Technologies Ltd and online travel agency Easy Trip Planners Ltd saw strong demand for their listings.
"Being the only online food delivery platform to list in India, Zomato is sure to see a bumper debut," said Shikher Jain, manager, fundamental equity research at Anand Rathi in Mumbai.
"It is an online company, a familiar brand, their business model is sustainable in a pandemic, so one can expect a lot of interest for it."
Zomato, which was launched in 2008, had 161,637 delivery partners during December 2020.
In India, Zomato battles competitors such as Accel backed Swiggy and Amazon. While Swiggy and Zomato dominate the Indian food delivery market, which research firm RedSeer estimates is worth $4.2 billion, Amazon remains a relatively new and smaller player.
Zomato logged a 98.4% jump in revenue from operations for the year ending March 2020, while its loss widened to 23.67 billion rupees from 9.65 billion rupees a year earlier.
Earlier this year, food delivery firm Deliveroo's shares fell 30% on the first day following its listing in London.
Zomato's offer will comprise a fresh issue of shares worth up to 75 billion rupees and top shareholder Info Edge will sell shares worth 7.5 billion rupees.
($1 = 74.4530 Indian rupees)
(Reporting by Chandini Monnappa and Anuron Kumar Mitra in Bengaluru; Editing by Subhranshu Sahu and Shounak Dasgupta)
